The way the tense keeps changing I can't figure out whether this is something you're contemplating or have already done.

Sorry about the tense changes .... This plan came to me rather suddenly from DW and I started out writing the post as a hypothetical, but we actually went through a lawyer and did this. But my real questions were about the tax ramifications, which are in the future.

I thought it was potentially dangerous too, but there are some positive features. We got the remainder of the mortgage paid off (although this wasn't much anyway). We saved the property from going into foreclosure. We got a cash payout. We appended a clause to the contract that gives us the option to buy the property back within six months. (DW has a plan -- as well as a back-up plan B -- to raise the money.) According to DW, this "option" talk entails that the buyer would be in violation of the contract if he were to sell the property without either (a) a release from the option, or (b) the passage of at least six months. (The word "option" doesn't sound that way to me, so she says she'll get the buyer to spell this out in writing to me.)

I usually do our taxes, but DW suggests that this might be a year to have the taxes professionally done. (Both the sale and the re-purchase of the property will be 2013 events.)